Review of Cyclone Pool

CHAMBERS CALL FOR ACTION TO IMPROVE INSURANCE AFFORDABILITY IN THE NORTH

Townsville and Cairns Chambers of Commerce Meet with Federal Treasury on Cyclone Reinsurance Pool Review

The CEOs of the Townsville and Cairns Chambers of Commerce met with representatives from Federal Treasury in Townsville this week to discuss the performance of the Cyclone Reinsurance Pool (CRP) and its impact on North Queensland businesses.

Townsville Chamber CEO Heidi Turner said the Chambers welcomed the opportunity to provide local insights but remain concerned that the pool is not consistently improving insurance affordability or availability in northern Australia.

“We’ve seen some positive movement in strata and small business policies under $5 million, but outcomes remain inconsistent, especially for domestic and commercial property insurance,” Ms Turner said.

“The community is effectively paying twice: once through taxes (GST and then Stamp Duty), and again through insurance premiums that don’t reflect the reduced risk that the Cyclone Pool covers.”

Key issues raised by the Chambers during the meeting included:

• Inconsistency across markets: Domestic and business premiums continue to rise, while strata and some business renewals (under the $5m cap for business) have seen only minor, inconsistent reductions.
• Limited coverage for SMEs: The $5 million asset threshold excludes most regional small and medium sized businesses and will prevent them from also benefiting from mitigation discounts due to be released in 2026.
• Low business participation: Only $20 million, just 2.7%, of the $717 million underwritten under the pool relates to business insurance, reflecting limited uptake and competition.
• Lack of insurer pass-through: With ACCC reporting reductions of up to 17%, and that not being the experience on the ground, there are concerns about whether savings are reaching consumers.
• No new commercial insurers: No new insurers have entered the market since the CRP began, 
• Need for clarity and consistency: Definitions of “flood” differ between councils and insurers
• Mitigation efforts must reduce premiums: Currently there is no clear cost–benefit link between mitigation investment and premium reduction, mitigation at this stage just reduces the risk of the insurance industry.

Ms Turner said the Chambers support the continuation of the Cyclone Reinsurance Pool, as it is still less than a year since the smaller insurers were required to join the pool,  but believe legislative adjustments are essential for it to meet its objectives.

“There have been excellent reviews and recommendations which have been produced based on inquiries and submissions made by many across the country, but we need to see action. Without reform, businesses will continue to face unsustainable premiums, or worse, operate uninsured while insurers report record profits,” Ms Turner said.

Cairns Chamber CEO Patricia O’Neill called for greater transparency and stronger requirements for insurers to pass through savings to customers.

“We need to ensure that any reduced risk to insurers translates into real relief for the people and businesses paying the premiums,” Ms O’Neill said.

The Chambers, collectively representing over 1,000 businesses across North Queensland, will continue working with Treasury, insurers, and all levels of government to ensure fair, accessible, and sustainable insurance solutions for the region.

WHAT'S NEXT

We will be creating a submission that addresses these challenges to submit to Treasury, and welcome our members providing their experience around the affordability and accessibility of insurance and the impact on their business.  Real business examples good or bad, adds weight to our submission and we welcome you to share your experiences with us.  Please email members@townsvillechamber.com.au